First by size. I have a bin for small scraps the kids can dig in or myself.
Then anything substantial enough to make a prodject from. I sort by type, denim, twill, knit, some quilting and print types are sorted by color. That is inspiring. Most of the other types are menat for a certain type of project anyway. Then I have a few bolts, I keep the bolt whenever possible. Those are fabrics which I just got an excellant deal on. I keep colors in clear bins. Others sorted by type are in boxes clearly marked. I wish I had room for it all to be vissible.